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Summary:

In the fight about royalties from streaming media services like Pandora, Popular cellist Zoë Keating says she’s willing to give up the money in exchange for data. It’s an idea that’s gaining traction elsewhere, too, as more companies are paying consumers for their truly valuable data.

People love to call data the new oil, but that might be selling it short. It’s only oil when we’re talking about pools of unrefined data like the stuff web companies collect, which has to be processed and transformed into something useful. There are certain types of data, though — especially data about consumers — that are as good as money in the bank without any work at all. And if you don’t believe me, ask popular cellist Zoë Keating.

As a bill attempting to lower the royalty rates paid to artists by streaming music services such as Pandora works its way through Congress, Keating took to her Tumblr blog last week and offered a solution that both sides should listen to, but won’t. You might have read about her stance in Billboard or ITworld already, or perhaps on Slashdot. If you haven’t, here it is in a nutshell, from Keating’s blog: “The law only demands I be paid in money, which at this point in my career is not as valuable as information. I’d rather be paid in data.”

Leaving aside the entire issue about royalties and copyright (and privacy policies), her statement is still powerful. Keating understands that in order to prosper in a world of digital music — just like in the world of e-commerce, digital publishing, you name it — information is power. The names, email address and perhaps mobile numbers of individuals listening to her music are nice, clean data that Keating could use with little to no analytic effort by reaching out to fans when a new tour is coming to town or a new album drops.

Actually, Keating noted in a subsequent blog post on Tuesday that even less-personal data can have a material impact on a performer’s bottom line. Using postal code data provide to her from iTunes sales, she’s able to plan tours more efficiently because she knows, or can make a safe assumption, that she has paying fans in certain cities.

Touring and merchandise sales remain most artists’ primary means of income, and the current royalty rate of $.0011 per play doesn’t add up fast (at least according to Keating’s math), so it’s easy to see why she — and probably many other up-and-coming or niche performers — would rather have the data that properties like Pandora almost certainly have.

And whether Keating knows it or not, the idea of using data as a substitute for money extends beyond web radio stations and musicians arguing about royalties. A couple weeks ago, I highlighted a handful of attempts to convince consumers to hand over, in exchange for cash rewards or product discounts, valuable data that advertisers can’t collect by tracking their online activity. This is data such as recent and future purchases, personal interests, your web-surfing habits and where you shop in the physical world.

Just like Keating is willing to forgo one-tenth of one cent per play (real money, even if not a lot) in exchange for data, these brands are willing to trade cash or something like it for data they don’t have to run through a Hadoop cluster and seven segmentation algorithms before they can tie it to a real person. They know they have to give a little bit in order to improve upon the status quo that’s good, but not nearly good enough for their purposes.

Previously, the notion that data is the currency of the web meant users gave away their behavior data to web sites in exchange for free services. Slowly but surely, however, that notion seems to be evolving. Maybe Zoë Keating wants data in lieu of royalties for the privilege of streaming her music, and maybe a web site wants my offline location data enough to give me a gift card worth enough that I’d hand it over. Either way, it’s all about the realization that some data is worth its weight — and then some — in cold, hard cash.

Feature image courtesy of Flickr user eschipul.

  1. Data “are”… not data “is”

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    1. “Data” can be used as a mass noun.

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    2. Besides, it’s not like they cannot change it
      http://bit.ly/UJVAal

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  2. This has very interesting implications for digital marketers. An enormous amount of marketing power is captured within consumer digital data, not just for professional marketers, but for the average member of society as well.

    Who knows, maybe the new web currency will become a hybrid of real money and consumer data. Either way, it does not look as though consumer data collection systems on the Internet will slow down anytime soon, however, the structure of them may require alterations with stories like this one. Interesting read.

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  3. *********** * future pass by data hi environment indispensable technologyes*********** . * .

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  4. one user request does not a business model make.

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    1. The undertone in this story implies that the value of consumer data is equivalent, if not worth more than the value of hard cash – true, one user request does not warrant a new business model – but if an idea like this caught on and spread through society at large, then it could very well impact some of the current business models that we have in place today and/or warrant alterations or new models to be developed.

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  5. Barter has been around far longer than money.

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    1. Yes there is a barter involvement here but this model computes the step after the barter exchange. The data provided by this exchange model can be strategically computed to provide receivables beyond the value of the data exchanged in terms of barter.

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  6. Derrick, It’s true there is value in the data but then there also need to be standards & ways to monitor that the data being delivered is complete & accurate. Right now I’m researching Dun & Bradstreet for an article as they’ve fabricated my business information & ignored the edits I made to try & correct the situation. The reality is they just want me to pay their subsidiary, D&B “Credibility” Corp to fix the problems they created … but where’s the credibility?

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  7. Derrick, It’s true there is value in the data but then there also need to be standards & ways to monitor that the data being delivered is complete & accurate. Right now I’m researching Dun & Bradstreet for an article as they’ve fabricated my business information & ignored the edits I made to try & correct the situation. The reality is they just want me to pay their subsidiary, D&B “Credibility” Corp to fix the problems they created … but where’s the credibility?

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    1. Derrick Harris Sunday, November 25, 2012

      Tina,

      That’s a good point, and one I assume will be addressed when/if data as currency becomes more commonplace. Right now, for example, artists can get ask for accounting from record companies around album sales, etc., and possibly from streaming services as well around plays for the purposes of royalties. Some sort of audit on data might be possible, too, in situations where data is part of the contractual payment.

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